Casino operator Donaco International Ltd reported group quarterly earnings before interest, taxation, depreciation and amortisation (EBITDA) that fell 41.0 percent in the three months to June 30, compared to the prior quarter.
The group EBITDA in the latest reporting period was AUD2.40 million (US$1.61 million) versus AUD4.07 million in the three months to March 31.
Donaco’s group net revenue was down a more modest 8.9 percent quarter-on-quarter, to AUD7.55 million.
The firm said the latest result had been affected by a VIP-gambling win rate unfavourable to the house at its DNA Star Vegas property (pictured) in Poipet, Cambodia, on that country’s border with Thailand. The complex has historically been the group’s main generator of earnings.
Such quarterly VIP win rate was -1.06 percent, versus 4.09 percent in the prior quarter.
Rolling chip volume for DNA Star Vegas in the June quarter had nearly doubled sequentially, at AUD19.46 million, relative to AUD10.02 million in the three months to March 31.
Donaco stated in a Monday filing to the Australian Securities Exchange: “Star Vegas’ EBITDA result was impacted by an anomalous VIP win rate and non-recurring audit adjustments.”
The firm added: “This in conjunction with a renewed focus on maximising operational efficiencies moving forward has led Donaco to anticipate stronger earnings margins in the coming quarters.”
The company also runs the Aristo International Hotel at Lao Cai in Vietnam, on that country’s border with mainland China.
Property EBITDA at Aristo actually rose 125.9 percent sequentially in the quarter to June 30, to AUD1.31 million. Net revenue at Aristo for the reporting quarter was up 99.2 percent quarter-on-quarter, to AUD2.51 million.
VIP rolling chip turnover at Aristo was up 266.0 percent quarter-on-quarter, at AUD322.96 million. The property’s VIP win rate for the latest reporting period nonetheless slipped to 1.66 percent, from 2.99 percent in the March quarter.
“A core focus for Donaco during the June quarter was to progress [the] gradual and methodical reopening of Aristo towards full operating capacity,” said the company.
It added: “Donaco commenced this reopening strategy in the March 2023 quarter after China, the country where the vast majority of Aristo’s patrons originate from, announced the full reopening of its borders with Vietnam in January this year.”
The firm said such reopening was “on track to reach full operational capacity in the current quarter”.
Donaco’s non-executive chairman, Porntat Amatavivadhana, was cited as saying in prepared remarks: “The June quarter marked an important step for Donaco as we reach a return to full-scale operations.”
He added: “Pleasingly, the outlook for our business remains promising. Travel inflows from China to Vietnam are expected to continue to ramp up.”
In addition, regarding the outlook for the Poipet business, “the Cambodian government recently launched a major tourism campaign to attract Thai visitors, which is highly encouraging for our Star Vegas casino,” said the chairman.
“Backed by a healthy balance sheet and a clear line of sight towards enhanced operational efficiencies, we are well placed to capitalise on the emerging opportunities ahead and deliver long-term value for our shareholders,” noted Mr Amatavivadhana.
